Wang Qiang, an analyst with CCID Consulting, told ZDNet Asia in an e-mail that the momentum is not likely to slow down, though it will see some competition.

"Linux will maintain a fast growth. But at the same time, it will face strong competitive pressures," Wang said, highlighting other key challenges such as the need for ongoing research and development.

"Unprecedented fierce competition" is expected throughout 2007, and Linux vendors in China will have to look at expanding their sales channels or even consider acquisitions to maintain their competitive edge, he said.

But while Linux is slowly growing its foothold—accounting for 2.5 percent of the overall non-embedded operating system market in the first quarter, up 0.4 percent from 2006—the platform remains in a "weak position", Wang said.

"China's open source industry is still in the early stages," he explained. "Compared with competing products such as Windows and Unix, Linux is still relatively weak and vendors with economies of scale are relatively rare."

Keeping a stronghold in the market, Windows and Unix command market shares of 41.8 percent and 53.9 percent, respectively.

In China, the adopters of Linux are mainly the government, education and the telecommunications sectors.

Linux is popular as a server operating system because of its "relatively stable" performance and cost-effectiveness, Wang said, noting that the use of desktop Linux though is rare.

China's first-quarter 2007 market growth was largely in the government, financial services and telecommunications sectors, which accounted for 34 percent, 22.5 percent and 21.2 percent of the market, respectively. Another key market was the education sector, which accounted for about 10 percent of the market—no change from 2006 figures.

The Chinese government "energetically encourages" its ministries and the education sector to adopt Linux, Wang noted.

Indeed, the government is driving much of the country's open source projects.

Peter Junge, a program manager and senior engineer for open source technology at Beijing Redflag Chinese 2000 Software, told ZDNet Asia: "The main drivers of open source software (OSS) in China are the public administrations. Universities and other institutions also run a lot of open source projects.

"Most of the Chinese open source companies I know started out as government-supported projects," he added.

Beyond Linux as a server operating system, open source is also increasingly being adopted in other areas. These include Web servers running the LAMP (Linux, Apache, mySQL and PHP) stack, or JBoss as an application server, said Junge.

Talent crunch

As with most of the challenges in other growing IT industry segments, the main barrier to wider adoption of OSS in China is the lack of qualified engineers.

"This is especially a big issue for local Chinese companies because they can hardly compete with international enterprises when it comes to recruitment," Junge said. "Foreign companies are absorbing the vast majority of experienced engineers who can drive projects, as well as graduates from top universities."

"Startups are almost bound to fail in the current software ecosystem because they cannot find the right talent," he added.

But there are ways to plug the skills gap. Wang said: "In China, apart from formal degree-based education, IT training is also growing rapidly, and the market is becoming increasingly mature. We believe that this will become a new and important means to make up for the lack of OSS talents.

"In addition, actively promoting the development of the open source communities, enhancing the publicity effort for open source systems, and attracting a large number of enthusiasts to join open source teams are some of the ways to improve the situation," he added.

And what is the profile of open source developers? "Despite the often heard rumor that OSS projects are driven by some weird hippies, the truth is that 95 percent of people who join OSS projects have a professional background," Junge said. "The vast majority of people I know [who are involved] in OSS projects are very serious, too."